What we’re reading (9/3)
“The Disappointing Bet That Could Turn Into The Biggest IPO Of The Year” (Wall Street Journal). “An AI boom is considered likely to boost demand for chips that go in servers, rather than in smartphones and home computers, where Arm is biggest. Still, Arm pitches itself as a likely beneficiary, saying growth in AI-enabled systems, such as self-driving cars, could mean more demand for chips using Arm designs. ‘Arm will be central to this transition,’ the IPO prospectus says.”
“Avoid Trendy Economics” (Econlib). “With the rise of social media (especially Twitter), it has becomes easier to observe changes in the zeitgeist. Over the past few years, I’ve seen the following trends: 1. Claims that increases in the minimum wage do not have negative side effects. 2. Claims that we don’t have to worry about big budget deficits when the interest rate is low. 3. Claims that changes in the money supply don’t impact inflation. 4. Claims that neoliberalism no longer works, and that we need an industrial policy. In each case, trendy pundits rejected long established economic principles. And now the chickens are coming home to roost.”
“The Myths We Tell Ourselves About American Farming” (Vox). “‘These factory farms operate like sewerless cities,’ said Tarah Heinzen, legal director of environmental nonprofit Food and Water Watch. Animal waste is ‘running off into waterways, it’s leaching into people’s drinking water, it’s harming wildlife, and threatening public health.’ Yet in practice, the Environmental Protection Agency appears to be largely fine with all that.”
“A S.A.D. Story: What Can We Learn From The 1970s?” (Paul Krugman, New York Times). “[T]he mechanism behind the Biden disinflation has been fundamentally different from the mechanism behind the Ford disinflation. The story that most easily fits the facts is long transitory — the gradual resolution of economic disruption caused by Covid and its aftermath.”
“Cash Piling Up On The Sidelines” (LPL Research). “Higher rates this year have created a high bar for cash coming off the sidelines. Assets in money market funds have climbed to nearly $5.6 trillion, a record-high and a notable 18% increase year to date. For reference, money market funds invest in short-term, high-quality debt or cash equivalents and are intended to provide investors with low-risk income generation and stable liquidity. It is important to note that money market funds are not considered ‘risk-free’ like U.S. Treasuries and are not protected by the Federal Deposit Insurance Corporation (FDIC), which generally insures deposits up to $250,000 per bank.”
